43 rd Annual Western States Highway Equipment Managers Association Conference Washington State Department of Transportation Presentation August 29, 2011 Greg Hansen Fleet Administrator

Equipment Plays a Critical Role in Operating and Maintaining The Highway System 2 2

4,800 Vehicles & Construction Equipment 10,000 Pieces of Supporting Equipment TEF Equipment 4,500 - Wireless Radio System Components 1,350 - Equipment Attachments (primarily snow and ice) Fuel System Components and Generators 40 - Reproduction and Photogrammetry Pieces Field Engineering Survey Equipment 1,700 - Materials Lab Testing Equipment 1,110 - Message Signs and Impact Attenuators Equipment and Lab Trailers 3

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5 Expenditures Planned For The Biennium $145.8 Million To Deliver Essential Program Services

Supported Customers 6

Work Force 7

Doing More … With Less 8

Expenditures Planned For The Biennium $145.8 Million To Deliver Essential Program Services 9

Fuel Usage and Cost 10

Where we’ve been Because of budget constraints across all department programs over the past several biennia, the department limited the total amount of revenues that TEF was authorized to collect from rental charges to department programs. As a result, TEF has not been able to increase equipment rental rates to fully match the significant increases in equipment costs, fuel, labor, and other operating costs that occurred. In order to make up the funding shortfall, equipment lifecycles were extended and equipment purchases were deferred. While that worked in the short term to plug the gap, it did not solve the problem long-term, as there is now a significant backlog of equipment that needs to be replaced. Equity In The Fleet Has Been Depleted 11 Pressures on TEF Program Comments Legislature transfers funds-$3,500,000 -$5,000,000 Transferred to MVF Unfunded fuel costs -$6,000,000-$2,000,000 Fuel costs were not fully funded Unplanned increase in fuel usage -$1,300,000 Increases occurred due to the Construction Programs tempo Unfunded COLA increases -$1,400,000 OFM oversite Inventory adjustment -$1,000,000 Non cash working capital adj. Unfunded inflationary equipment costs -$1,000,000-$1,500,000-$300,000 Inadequate funding available to purchase all "Meets Criteria" equipment -$14,000,000-$12,000,000-$17,000,000Leadership Team decision Subtotal -$13,000,000-$6,200,000-$14,300,000-$12,000,000-$17,000,000 Actions Taken Deferred "Meets Criteria" equipment $4,000,000$2,000,000$3,300,000$12,000,000$17,000,000Aged beyond its economic life Extended equipment life cycles $9,000,000$4,200,000$11,000,000 Defers replacement to out years Subtotal $13,000,000$6,200,000$14,300,000$12,000,000$17,000,000 Variance$0

Time and Effort Repairing Equipment has Dramatically Increased Repair Hours and Dollars – The life cycle of the existing fleet have been substantially extended. Equipment breakdowns are now common. For instance, 2009 required the equivalent of 10 additional mechanics to keep up with required repair work. Why Do We Need To Invest In Equipment Replacment? 12

Why do we need to fund now? We’ve reached the tipping point Time and Effort Repairing Equipment has Dramatically Increased Repair Hours and Dollars – The life cycle of the existing fleet have been substantially extended. Equipment breakdowns are now common. For instance, 2009 required the equivalent of 10 additional mechanics to keep up with repair work 13

14 Aging the Fleet A Tale of Two Trucks

Risks Associated with Aging the Fleet  Equipment availability will go down  Longer response times  Efficiency decline in day to day operations 15  Unreliable equipment effects the ability of Maintenance and Construction delivering their programs  Potential to adversely affect the traveling public and freight mobility

Performance Measures In Service Time Equipment Availability Preventive Maintenance Labor Pie Charts 16

In Service Time 17

Equipment Availability 18

Statewide PM Completed on Time 19

Mechanic Labor Hours 20

Energy conservation and air quality concerns continue to be significant issues for our agency. Over the years, policies have been developed and implemented to ensure that limited resources are utilized in the most cost-effective, efficient manner possible. Therefore, results of third party analysis and testing of new products, devices and technology for fuel savings and emission reductions must be provided by the vendor(s) prior to implementing the use of a new products, devices and technology with regards to the agency’s fleet and equipment. Prior to using a new fuel additive or fuel and emission reduction device and technology, testing and product evaluation from the U.S. Environmental Protection Agency’s (EPA) “Gas Saving and Emission Reduction Devices Evaluation” program is required. WSDOT will review the evaluation and determine if the product merits field testing. The link to the EPA’s “Gas Saving and Emission Reduction Devices Evaluation” program is Fuel Additives 21

Questions? Contact: Greg Hansen - Title: Fleet Administrator - Phone: